The corporate regulator said investors “turn off” when faced with wordy disclosure documents and pointed out that technology is an integral part to “improving the effectiveness of disclosure”.
In an effort to improve investor engagement with product disclosure, the regulator said it will work with product providers AMP and Vanguard to develop and means test a “short, online ‘key facts’ sheet and self-assessment tool”.
“We want investors to have trust and confidence in our financial system and part of that is for ASIC to explore new ways for investors to get to grips with their investments,” ASIC chairman Greg Medcraft said.
“We encourage the industry to harness the opportunities of digitisation. More and more, people are accessing financial products and making decisions using mobile devices,” he said.
“More work needs to be done on short disclosure. Investors tend to turn off when faced with wordy disclosure documents. If they need more detail, investors can access further layers of information from product providers online,” Mr Medcraft said.
The regulator also said product providers could also present information though an “interactive or video form” and offer online tools for investors to “assess their understanding of a product".
“ASIC acknowledges AMP and Vanguard in taking this first step. We will use the findings from the project to inform our broader work on digital disclosure,” Mr Medcraft said.
ASIC added the project it is undertaking with AMP and Vanguard complements its recent effort to seek industry feedback on electronic PDSs.
